Get organized and set goals
Defining your goals and setting up your rules is key to being successful. It makes you gradually get better, and allows you to track your progress. Extending credit is more than simply selling and hoping to get paid, and there are no shortcuts if you don’t want to run the business at the mercy of your customers’ payment schedules.
Set up your credit policies upfront
according to best practices
Like many processes, an AR process also have a great chance of being successful if it’s set up in the right way. Take the time to lay out in detail what you want your AR policies to accomplish for your business. Share this with all the stakeholders in your team. The time you are investing in it will be well worth the reward down the road.
Decide on the right terms
The terms you extend your customers decide your competitiveness, but they also decide your risk exposure. Complementing your basic terms with contingency plans and additional conditions gives you that extra protection that can be a lifesaver while going through cash flow cycles.
Know when to offer payment plans
and when to charge late fees
As you think about speeding up your customers’ payment schedules, take advantage of effective tools and help them prioritize you over other suppliers. Tools like payment plans & late fees, when applied correctly & professionally, can give the kind of kick that effectively motivates your customers to pay you first over anyone else.